Duterte going after rich who don’t pay right taxes

President Duterte is determined to run after the country’s entrenched elites who amass wealth without paying the proper taxes.

The President has expressed disdain for the “ruling elite” who expect the government to kneel before them, telling Manila’s 400 that he owed them no favors since he shut them out of his election campaign.

“I avoided money, especially coming from persons, ‘yung the 400 of society that who are there enjoying the benefits of governance, protection and all, using public streets and not paying any money, using government property almost one century,” Duterte said during the Sixth Professional Summit at the Manila Hotel last Thursday.

“Had I not become the President, I don’t know if we could have recovered those properties. I don’t know if you collected any – a few million from fraud. And well, panahon ko, bayad (Well, you have to pay under my watch),” he added.

Duterte was referring to the group of rich and influential families of Manila that compromised the high society before the martial law regime. The group has since expanded with the inclusion of successful tycoons and politicians.

In his remarks last week, the President also bewailed the “condescending attitude” of the ruling elite who use money and influence to get what they want but evade tax payments.

“They do not pay taxes and they expect government to kneel them down because they hold power. They have the publications and they have everything. So are the millionaires who contribute to the campaigns,” he said.

“Kasi kung ayaw talaga ninyong bumayad, noon siguro. But ngayon, sinasabi ko, ayaw ko ng corruption (If you don’t want to pay, it was possible in the past. But now, I am telling you I hate corruption),” he added.

While they managed to evade authorities in the past, Duterte mentioned that his administration was able to compel a tobacco firm and an airline company to settle their tax liabilities.

He was referring to the 140 billion settlement made by Mighty Corporation with the Bureau of Internal Revenue. The Lucio Tan-owned Philippine Airlines also agreed to pay 16 billion worth of navigational fees and charges it owed the government for years.

The President earlier vowed to take steps to open up the economy to new players and foreign investors, particularly in the power, energy and telecoms sector. He has also promised to combat the “monster” oligarchs who enrich themselves through government connection and protection.

1726 B lost due to tax gap Meanwhile, the BIR disclosed that it has lost more than 1726 billion for the first three quarters of the year due to tax gap, or “tax liability imposed by law that it is not paid voluntarily and timely.”

In a study prepared by the bureau’s Operations Group (OG), the value-added tax (VAT) sustained the biggest tax gap of 1323 billion, followed by personal income tax at 1190 billion.

The position paper stated that the bureau could easily hit its collection target of 11.8 trillion for the year even if only a portion of the tax gap could be closed.

Statistics showed the bureau has already raised 11.3 trillion from January to September leaving the balance of 1523 billion for the last quarter to meet the goal.

MTS to close tax gap To collect the 1523 billion, the BIR has come out with the so-called Medium Taxpayers Segmentation (MTS) program.

Under the intensified collection project, the top 500 taxpayers of revenue regional offices in Metro Manila and other key cities are being monitored vis-a-vis their tax compliance.

Businesses which declared lower sales and remitted reduced taxes compared to the previous year will be investigated and ultimately compelled to pay deficiency taxes.

The audit will give top priority to top taxpayers who did not enroll in the electronic filing and payment system (eFPS) and those who failed to submit summary list of sales, purchases and importations.

According to OG Chief of Staff Elenita Quimosing, addressing the tax gap will greatly help in attaining the outstanding goal for the remainder of the year. (With a report from Jun Ramirez)